Petróleos Mexicanos (trademarked and better known as Pemex, Spanish pronunciation: [ˈpemeks]), which translates to Mexican Petroleums, is the Mexican state-owned petroleum company, created in 1938 by nationalized petroleum and the expropriation of all private foreign and domestic companies at that time. Pemex has a total asset worth of $415.75 billion, and is the world's second largest non-publicly listed company by total market value,[3] and Latin America's second largest enterprise by annual revenue as of 2009, surpassed only by Petrobras (the Brazilian National Oil Company).[4] The majority of its shares are not listed publicly and are under control of the Mexican government, with the value of its publicly listed shares totaling $202 billion in 2010, representing approximately one quarter of the company's total net worth.[3][5][6]Emilio Lozoya Austin is the current CEO of Pemex.

In February 2015, the board approved a $4.16 billion spending cut, pulling the company’s budget down 11.5 percent from the 2015 budget approved by Mexico’s congress. The company also said it will delay deepwater exploration plans and cut jobs in response to weak oil prices.[7]

Asphalt and pitch had been worked in Mexico since the time of the Aztecs. Small quantities of oil were first refined into kerosene around 1876 near Tampico. By 1917 commercial quantities of oil were being extracted and refined by subsidiaries of the British Pearson and American Doheny companies, and had attracted the attention of the Mexican government who then claimed all mineral rights for the state as part of its Constitution.

In 1938, President Lázaro Cárdenas (1934-40) sided with oil workers striking against foreign-owned oil companies for an increase in pay and social services. On March 18, 1938, citing Article 27 of the Constitution of 1917, President Cárdenas embarked on the state-expropriation of all resources and facilities, nationalizing the United States and Anglo–Dutch operating companies, creating Pemex. He is famous in saying in his speech addressing the nation,

I ask the entire Nation to furnish the necessary moral and material support to face the consequences of a decision which we, of our own free will, would neither have sought nor desired.[8]

He framed expropriation as a necessary national response to the injustice of the operations of foreign companies operating on Mexican soil. Expropriation was not outright confiscation, since the Mexican government promised to compensate companies. However, in retaliation, many foreign governments closed their markets to Mexican oil. In spite of the boycott, Pemex developed into one of the largest oil companies in the world and helped Mexico become the fifth-largest oil exporter in the world.[citation needed]

In 2009, the U.S. Justice Department reported that some U.S. refineries had bought millions of dollars worth of oil stolen from Mexican government pipelines. Criminals, especially drug gangs, tap remote pipelines and sometimes build their own pipelines to siphon off hundreds of millions of dollars worth of oil each year. One oil executive has been charged and has pleaded guilty to conspiracy charges. The U.S. Homeland Security Department will return $2.4 million to Mexico's tax administration - the first money seized during a binational investigation into smuggled oil that authorities expect to lead to more arrests and seizures. The President of Houston-based Trammo Petroleum is set to be sentenced in December after pleading guilty in May.[11][12]

On 19 September 2012 an explosion at the Pemex gas plant in Reynosa, Tamaulipas killed 30 and injured 46 people. Pemex Director Juan Jose Suarez said that there was "no evidence that it was a deliberate incident, or some kind of attack".[13][14][15]

On January 31, 2013, an explosion occurred at the administrative offices of Pemex in Mexico City. At least 37 people were killed and at least 126 were injured. The cause has not been confirmed. Local media reported that machinery exploded in the basement of an administrative center next door to the 52-story Pemex tower.[16]

High taxes on Pemex revenue provide about a third of all the tax revenues collected by the Mexican government.[17] Despite its current $80.6 billion in revenue, Pemex pays so much in taxes that it has only been able to make ends meet through massive borrowing, so that it now owes a staggering $42.5 billion, including $24 billion in off-balance-sheet debt because the Mexican government treats the company as a major source of revenue. The state-owned company pays out over 60% of its revenue in royalties and taxes, and those funds pay for 40% of the federal government's budget. In 2005, with record-breaking oil prices, the company saw an unexpected excess of funds. This trend continued in 2006, but these funds have been used to pay salaries of bureaucrats and current costs, instead of being invested in projects of exploration and production; during the President Fox administration, these funds represented around 70 billion dollars,[18] yet the administration said there was not enough money to pay the debts. The lack of investments prevent adequate refining capacity to be added. While exporting crude oil, Mexico imports expensive gasoline.[19]

It is said that Pemex lacks the equipment, technology, and financial means to explore for new reserves in deep water or shale gas; hence, a reform to Mexican law has been put forward by the government.[20][21][22]

In addition to a failing infrastructure, dwindling reserves have created urgency in completing some type of reform. Only 20% of Mexico has been extensively explored for further reserves, and it has been argued that Pemex will need the help of some form of foreign investment to successfully explore new reserves, including in the Gulf of Mexico.[23]

In an interview on the oil news website [24] in November 2005, a Pemex employee spoke anonymously of the company's inability to grow production, stating that the company and country is at Hubbert's Peak. The person interviewed believed export levels could not be recovered once peak had passed, as the size of current fields that have been discovered or are coming online represent a fraction of the size of the oilfields going into terminal decline. Annual production has dropped each year since 2004.[25] Furthermore, it has been reported the 2005-2006 daily oil production was down by approximately 500,000 barrels per day (79,000 m3/d) (a large proportion of the country's 4,500,000 barrels) on the previous year. Pemex averaged 3.71 MMBPD in 2006.[25] Pemex has never produced 4 MMBPD or higher for a yearly average.[26] Pemex has been replaced as Latin America's largest company by Petrobras, according to the latest Latin Business Chronicle ranking of Latin America's Top 500 companies. To help capitalize the company, former President Vicente Fox brought forward the possibility of making shares of Pemex available to Mexican citizens and pension funds, to complement a current project-specific investment setup known as "Proyectos de Inversión Diferida En El Registro del Gasto" (Deferred Investment Projects in the Expenditure Registry);[27] this proposal, along with alleviating Pemex's heavy tax burden and a substantial budget increase, have met opposition in Congress.[28][29] President Calderón made clear at the beginning of his presidency that he would try his best to open up the sector to private investment. Pemex is Latin America's second largest company measured by revenues, according to a ranking of the region's 500 largest companies by Latin Business Chronicle, only behind, Brazilian oil company Petrobras. In June 2009, Pemex has asked for an extra $1.5 billion state aid to finance oil fields investments, reported Bloomberg.

President Felipe Calderón is calling for change in Mexico's oil industry after output at Pemex fell at the fastest rate since 1942. His comments came after Petrobras and London-based BP said they made a "giant" oil find of as much as 3 billion barrels (480×10^6 m3) in the Gulf of Mexico southeast of Houston. According Mexican Energy Minister Georgina Kessel, Mexico may seek to emulate Brazilian Oil rules that strengthened Petroleo Brasileiro SA as it considers regulation changes to revive the oil industry.[30]

In January 2014 Pemex signed a cooperation agreement with the Russian oil company Lukoil focusing on oil production and field exploration as well as exchange of knowledge in the aforemantioned areas, including actions for ecological preservation and environmental protection.[32]

There have been various allegations of corruption within Pemex for over a decade. These range from political contributions to the Institutional Revolutionary Party (over $200 million), "no show" jobs (individuals receive a salary while performing no duties whatsoever), various forms of fraud, embezzlement, and even under the table fuel sales. It has been estimated these various forms of corruption contribute to the loss of over $1 billion a year.[33]

Pemex has a long history of violation of human and labour rights regarding engineers, unrightfully considered to be "trusted workers" who have tried to unionize since 1995 and succeeded, after several repression episodes, in doing so in 2008 and 2009, although at a high human cost [34] This included the death of a person who was refused medical service at one of Pemex' hospitals because his son had just been sacked for belonging to this union, the Unión Nacional de Técnicos y Profesionistas (shorthand UNTyPP).[35] It also included forcing union members to resign to the Union from their hospital beds, as happened to three cancer patients in 2009. Up to date, and in spite of pressure by the Mexican Congress, the International Labour Organization, the Global Compact, the Industriall Global Union and thousands of citizens all over the world, workers sacked in 2002, 2004, 2008, 2009, 2010 and 2011 haven't been all reinstated nor has there been any reparation otherwise.[36][37] Pemex has never acknowledged to these violations of human rights.

^Government of, Mexico. "Expropriation." In Mexico's Oil : A Compilation of Official Documents in the Conflict of Economic Order in the Petroleum Industry, with an Introduction Summarizing Its Causes and Consequences. Vol. 3. Mexico City: Government of Mexico, 1940. 877